Crisis after crisis:

Why financial sector reform is not enough

Walden Bello

This article is published for the 10 Years On From The Crisis European Action Day (15th September 2018). TNI supports the 10 Years On campaign, which is an initiative of the Change Finance coalition.

It is now clear that financial crises are not discrete events but are linked phenomena that have been unleashed on the globe ever since the financial markets were liberalized during the Reagan-Thatcher era in the early 1980’s. To take just the three most prominent crashes, surplus capital that could not find profitable domestic outlets after the Japanese bubble burst in the late eighties found its way as speculative capital into Southeast Asia, where it contributed to the Asian financial crisis in 1997-98; and the Asian crisis, in turn, helped generate Wall Street’s implosion in 2008 owing to the Asian countries’ channeling their financial reserves – accumulated to protect them from a repeat of 1997 – into the US, where they helped fuel the subprime real estate boom.

The turbulence that hit global stock markets last February, causing much fright and a paper loss of 4 trillion dollars, was a reminder that the next big implosion may be just around the corner. A just concluded study by the Transnational Institute reveals that in 10 critical areas where major reform is needed, few to no measures have been taken to prevent a recurrence of 2008.[1]These areas range from shadow banking to fractional reserve banking to international financial governance to central bank accountability.

Skating on thin ice once more

So, not surprisingly, current indicators show that the world again is skating on thin ice.

First, the “too big to fail” problem has become worse. The big banks that were rescued by the US government in 2008 because they were seen as too big to fail have become even more too big to fail, with the “Big Six” US banks – JP Morgan Chase, Citigroup, Wells Fargo, Bank of America, Goldman Sachs, and Morgan Stanley – collectively having 43 per cent more deposits, 84 per cent more assets, and triple the amount of cash they held before the 2008 crisis. Essentially, they have doubled the risk that felled the banking system in 2008.[2]

Second, the products that triggered the 2008 crisis are still being traded. This includes around $6.7 trillion in mortgage-backed securities (MBS) sloshing around, the value of which has been maintained only because the Federal Reserve bought $1.7 trillion of them.[3]

US banks collectively hold $157 trillion in derivatives, about twice global GDP. This is 12 per cent more than they possessed at the beginning of the 2008 crisis. Citigroup alone accounts for $44 trillion, or 50 per cent more that its pre-crisis holdings, prompting a sarcastic comment from one analyst that the bank seems “to have forgotten the time when they were a buck a share,” alluding to the low point in the bank’s derivatives’ value in 2009.[4]

Third, the new stars in the financial firmament, the institutional investors’ consortium made up of hedge funds, private equity funds, sovereign wealth funds, pension funds, and other investor entities, continue to roam the global network unchecked, operating from virtual bases called tax havens, looking for arbitrage opportunities in currencies or securities, or sizing up the profitability of corporations for possible stock purchases. Ownership of the estimated $100 trillion in the hands of these floating tax shelters for the superrich is concentrated in 20 funds.

Fourth, financial operators are racking up profits in a sea of liquidity provided by central banks, whose releasing of cheap money has resulted in the issuance of trillions of dollars of debt, pushing the level of debt globally to $325 trillion, more than three times the size of global GDP.[5] There is a consensus among economists across the political spectrum that this debt build-up cannot go on indefinitely without inviting catastrophe.

China: Epicenter of the next Big Bang?

It is hard to predict where the next financial implosion will take place. There are, however, several candidates. One of them is China. A close examination of this country’s financial state would show that there is cause to worry.

Conventional wisdom holds that China is on the ascent and the United States is in decline, that China’s economy is roaring with raw energy and that Beijing’s “Belt and Road” mega-project of infrastructure building in Central, South, and Southeast Asia is laying the basis for its global economic hegemony.

Some question whether Beijing’s ambitions are sustainable. Inequality in China is approaching that in the United States, which portends rising domestic discontent, while China’s grave environmental problems may pose inexorable limits to its economic expansion.

Perhaps the greatest immediate threat to China’s rise to economic supremacy, however, is the same phenomenon that felled the US economy in 2008—financialization, or the channeling of resources to the financial economy over the real economy. Indeed, there are three troubling signs that China is a prime candidate to be the site of the next financial crisis: overheating in its real-estate sector, a roller-coaster stock market, and a rapidly growing shadow-banking sector.

The real estate bubble. There is no doubt that China is already in the midst of a real-estate bubble. As in the United States during the subprime-mortgage bubble that culminated in the global financial crisis of 2007–09, the real-estate market has attracted too many wealthy and middle-class speculators, leading to a frenzy that has seen real-estate prices climb sharply.

Chinese real-estate prices soared in so-called Tier 1 cities like Beijing and Shanghai from 2015 to 2017, pushing worried authorities there to take measures to pop the bubble. Major cities, including Beijing, imposed various measures: They increased down-payment requirements, tightened mortgage restrictions, banned the resale of property for several years, and limited the number of homes that people can buy.[6]

However, Chinese authorities face a dilemma. On the one hand, workers complain that the bubble has placed owning and renting apartments beyond their reach, thus fueling social instability. On the other hand, a sharp drop in real-estate prices could bring down the rest of the Chinese economy and—given China’s increasingly central role as a source of international demand—the rest of the global economy along with it. China’s real-estate sector accounts for an estimated 15 percent of GDP and 20 percent of the national demand for loans. Thus, according to Chinese banking experts Andrew Sheng and Ng Chow Soon, any slowdown would “adversely affect construction-related industries along the entire supply chain, including steel, cement, and other building materials.”[7]

A rollercoaster stock market. Financial repression—keeping the interest rates on deposits low to subsidize China’s powerful alliance of export industries and governments in the coastal provinces—has been central in pushing investors into real-estate speculation. However, growing uncertainties in that sector have caused many middle-class investors to seek higher returns in the country’s poorly regulated stock market. The unfortunate result: A good many Chinese have lost their fortunes as stock prices fluctuated wildly. As early as 2001, Wu Jinglian, widely regarded as one of the country’s leading reform economists, characterized the corruption-ridden Shanghai and Shenzhen stock exchanges as “worse than a casino” in which investors would inevitably lose money over the long run.[8]

At the peak of the Shanghai market, in June 2015, a Bloomberg analyst wrote that “No other stock market has grown as much in dollar terms over a 12-month period,” noting that the previous year’s gain was greater “than the $5 trillion size of Japan’s entire stock market.”[9]

When the Shanghai index plunged 40 percent later that summer, Chinese investors were hit with huge losses—debt they still grapple with today. Many lost all their savings—a significant tragedy for individuals (and a looming national crisis) in a country with such a poorly developed social-security system.

Chinese stock markets, now the world’s second-largest, according to some accounts, stabilized in 2017, and seemed to have recovered the trust of investors when they were struck by contagion from the global sell-off of stocks in February 2018, posting one of their biggest losses since the 2015 collapse.

Shadow banking’s long shadow. Another source of financial instability is the virtual monopoly on credit access held by export-oriented industries, state-owned enterprises, and the local governments of favored coastal regions. With the demand for credit from a multitude of private companies unmet by the official banking sector, the void has been rapidly filled by so-called shadow banks.[10]

The shadow-banking sector is perhaps best defined as a network of financial intermediaries whose activities and products are outside the formal, government-regulated banking system. Many of the shadow-banking system’s transactions are not reflected on the regular balance sheets of the country’s financial institutions. But when a liquidity crisis takes place, the fiction of an independent investment vehicle is ripped apart by creditors who factor these off-balance-sheet transactions into their financial assessments of the mother institution.

The shadow-banking system in China is not yet as sophisticated as its counterparts on Wall Street and in London, but it is getting there. Ballpark estimates of the trades carried out in China’s shadow-banking sector range from $10 trillion to more than $18 trillion.

In 2013, according to one of the more authoritative studies, the scale of shadow-banking risk assets—i.e., assets marked by great volatility, like stocks and real estate—came to 53 percent of China’s GDP.[11] That might appear small when compared with the global average of about 120 percent of GDP, but the reality is that many of these shadow-banking creditors have raised their capital by borrowing from the formal banking sector. These loans are either registered on the books or “hidden” in special off-balance-sheet vehicles. Should a shadow-banking crisis ensue, it is estimated that up to half of the nonperforming loans of the shadow-banking sector could be “transferred” to the formal banking sector, thus undermining it as well. In addition, the shadow-banking sector is heavily invested in real-estate trusts. Thus, a sharp drop in property valuations would immediately have a negative impact on the shadow-banking sector—creditors would be left running after bankrupt developers or holding massively depreciated real estate as collateral.

Is China, in fact, still distant from a Lehman Brothers–style crisis? Interestingly, Sheng and Ng point out that while “China’s shadow banking problem is still manageable…time is of the essence and a comprehensive policy package is urgently needed to preempt any escalation of shadow banking NPLs (nonperforming loans), which could have contagion effects.”[12] Beijing is now cracking down on the shadow banks, but these are elusive, and unless there is a fundamental reform in its national credit system to end the virtual monopoly by the export-oriented economic complex of the banking system, there will always be a strong demand for these sub rosa entities.

In sum, finance is the Achilles’ heel of the Chinese economy. The negative synergy between an overheating real-estate sector, a volatile stock market, and an uncontrolled shadow-banking system could well be the cause of the next big crisis to hit the global economy, rivaling the severity of the Asian financial crisis of 1997–98 and the global financial implosion of 2008–09.

While most of the players in China’s real estate and stock markets are mainly Chinese, a speculative earthquake there is likely to have a major impact on China’s vast holdings of US treasury bills and on China’s real economy, which has become tightly integrated into the global economy. Thus a major impact of such an event on the global economy is inescapable. In 2008, China was not a significant buyer of Wall Street’s mortgage-backed securities and other complex derivatives. Though it escaped the immediate consequences of the collapse of these Wall Street instruments, it was still hit indirectly, when the real economy of the US contracted, greatly reducing Chinese exports to the US and leading to a significant reduction in China’s GDP growth in 2008 and 2009. Today, with China being a major consumer of raw materials and agricultural products from developing countries and agricultural and advanced technological imports from the US and Europe, much of the rest of the world would be negatively affected by a crash of China’s real economy triggered by a crisis in its financial sector.

The gyrations of global finance continue to pose a threat to the world economy, and the continuing absence of effective regulation means speculative bubbles may build up in different nodes of the world economy. Today the bubble could be building up in China. Tomorrow it could be in Germany. When bubbles grow, then interact with other economic factors and even geopolitical ones, great uncertainty ensues, much like the anxiety that gripped the world when stock markets began spiraling downwards in February 2018, resulting in the loss of four trillion dollars in paper wealth. The 2018 stock market turmoil passed, but the next one may not pop without a bang.

What is to be done?

In the recently completed TNI study, the rationale is laid out in detail for 10 major imperatives for the global financial sector. These are: 1) Restrict operations of hedge funds and close tax havens; 2) Ban mortgage-backed securities and derivatives; 3) Move towards 100 per cent reserve banking; 4) Nationalize financial institutions that are “too big to fail”; 5) Reinstitute the Glass Steagall Act that placed a Chinese wall between commercial banking and investment banking; 6) Place drastic limits on executive pay; 7) Phase out credit ratings agencies; 8) Convoke a new Bretton Woods Conference to set up new institutions and rules for global financial governance, end the dollar’s monopoly as the world’s reserve currency, and establish new, fair arrangements for development and climate finance; 9) Make central banks accountable; and 10) Move towards full political, fiscal, and monetary union in the Eurozone countries or exit from the euro.

Day 40 of Occupy Wall Street in New York, Tuesday, October 25. Photos of protesters and life in Liberty Plaza, by David Shankbone

The aforementioned proposed measures, it must be pointed out, constitute a “minimum program,” that is, a set of moves that strengthen the world’s defenses against another financial crash while not eliminating the possibility of such an event. Capitalism as a system is structurally prone to generate financial crises, and the program outlined above assumes a global economic system that continues to function under the rules of capitalism. The successful implementation of these reforms will be a giant step in a longer process of transformative change. That change cannot, however, take place without addressing in a fundamental way all other key dimensions of capitalism, especially its engine: the insatiable desire for greater and greater profits.

Reformed capitalism or post-capitalism?

Ultimately it is the dynamics of the real economy that are the real determinant of developments in the financial economy. This is not a novel insight. From the perspective of Marxist economists, the gyrations of the financial economy are a result of the deep-seated contradictions of the real economy, in particular the tendency towards overproduction, or supply outstripping demand owing to the persistence of great inequality.

If weak demand in the real economy brought about by inequality is the problem, then it is obvious that the measures taken over the last few years by financial authorities, such as quantitative easing and negative interest rates, can only bring very limited and temporary relief to an economy in crisis and may in fact deepen the crisis in the medium term. Indeed, without addressing the crisis of demand in the real economy, a reformed financial sector would find it difficult to resist for long the intense pressures for capital to seek profitability in finance rather than in a stagnant productive sector.

For some, the most urgent need is the reform of capitalism. A program of financial reform would have to be integrated into a more comprehensive program of reform of capitalism. This enterprise would have to seriously address the lack of demand rooted in increasing inequality. It would have to bravely acknowledge its roots in the unequal power relations between capital and labor, how this unequal power translates into increasing inequality, and how inequality translates into anemic demand that acts as a brake on the expansion of production.

For others, capitalism’s constant search for profitability is a fundamental source of instability that will ultimately undermine all efforts to reform it – as happened to post-war Keynesianism in the late 1970s. Moreover, what must be addressed is not just socio-econmic inequality but the productive system’s drive to grow at the expense of the biosphere. What is needed, they say, is a post-capitalist program, one that is made all the more urgent by the climate catastrophe that is already unfolding.

One thing is certain. Calls from establishment reformers for a renewed commitment to capitalist globalization in the wake of resistance to neoliberal reforms are out of the question. These calls are rooted in a childlike faith that, in the long run, these measures will lead to the best of all possible worlds. The way forward, it is increasingly clear, will be largely determined by the outcome of a political struggle between two post-globalization camps.

The first espouses a defensive program that involves state management of the economy but leaves the capitalist mode of production largely intact (along with its class inequalities), though with discriminatory privileges for whole communities based on ethnicity, blood, and race (i.e., whitedom) and with borders sealed to migrants.

The second espouses stronger state and civil society management of the economy, one that moves it beyond capitalism, with a strong dose of radical income and wealth redistribution, while welcoming migrants and protecting democratic processes.

One would not be far off in characterizing this confrontation as between fascism and social democracy.

About the author

Walden Bello is an associate of the Amsterdam-based Transnational Institute and the international adjunct professor in sociology at the State University of New York at Binghamton and the author of 21 books, including the soon-to-be-published The Fall of China?: Preventing the Next Crash (London: Zed Books 2019), on which this article is based.

References

[1] This study, done by the author under the auspices of the Transnational Institute, will soon by published by Zed Books, under the provisional title of The Fall of China?: Preventing the Next Crash. This article is drawn from this book.

12. Court stops construction of Kenya’s coal power plant. Petitioners from Lamu celebrating the judgment of the National Environment Tribunal, 26 June (Twitter/(@deCOALonize)

Sudan’s Third Revolution

Sudan’s “Third revolution” began in the northern town of Atbara in December 2018. Street protests began after the removal of a wheat subsidy, escalating to sustained civil disobedience for about eight months. The protests led to a major political shift, when President Omar al-Bashir was deposed after thirty years in power.

A Transitional Military Council (TMC) replaced al-Bashir, but protesters held their ground, and in July and August 2019 the TMC and the civilian-led Forces of Freedom and Change alliance (FFC) signed a Political Agreement and a Draft Constitutional Declaration legally defining a planned 39-month phase of transitional state institutions and procedures to return Sudan to civilian democracy.

In August and September 2019, the TMC formally transferred executive power to a mixed military–civilian collective head of state, the Sovereignty Council of Sudan, and to a civilian prime minister (Abdalla Hamdok) and a mostly civilian cabinet, while judicial power was transferred to Nemat Abdullah Khair, Sudan’s first female Chief Justice.

Chilean protests challenge neoliberal state

The 2019 Chilean protests are ongoing. The protests began in Santiago, Chile’s capital, as a coordinated fare evasion campaign by secondary school students protesting increases in metro fares. This led to spontaneous takeovers of the city’s main train stations and eventually to open confrontations with the Chilean Police.

These protests morphed into a nationwide call to address inequality and improve social services. Soon millions were on the streets, forcing President Sebastián Piñera to increase benefits for the poor and disadvantaged,and to start a process of constitutional reform.

On 25 October, over a million people protested against President Piñera, demanding his resignation. Piñera has already canceled some interest payments on student loans, but protesters are demanding more relief for education payments and related debt.

5.5 million women form human chain in Kerala, India

On Jan. 1, 2019, 5.5 million women in the Indian state of Kerala (population 35 million) built a 386-mile human chain, spanning almost the entire state,to bring light to the issues women face in India.

The women gathered and took a vow to “defend the renaissance traditions” of their state, and to work towards women’s empowerment. In particular, they marched for an end to violence and intimidation against women trying to enter Kerala’s Sabarimala temple, a popular Hindu pilgrimage site.

Undoubtedly larger than the historical Women’s March in Washington, D.C. in 2017, this was one of the largest mobilizations in the world for women’s rights.

Algerian protests pave the way towards democracy

These protests, without precedent since the Algerian Civil War, have been peaceful and led the military to insist on president Bouteflika’s immediate resignation, which took place on 2 April 2019. By early May, a significant number of power-brokers close to the deposed administration, including the former president’s younger brother Saïd, had been arrested.

On 1 November, the metro was shut down in Algiers and trains into the city were canceled following a social media campaign calling for demonstrations. Police roadblocks also caused traffic jams. For the 37th weekly Friday protest, which coincided with the celebration of the 65th anniversary of the start of the Algerian War for independence from France, tens of thousands of demonstrators called for all members of the system of power in place to be dismissed and for a radical change in the political system.

There has not been an overhaul of the political regine, and protestors have returned to the streetsafter an election held on 12 December, arguing that the winner Abdelmadjid Tebboune, 74,and the four other candidates were closely linked with the rule of the deposed Mr Bouteflika.

The statement calls on member states to “promote alternatives to conviction and punishment in appropriate cases, including the decriminalization of drug possession for personal use”.

While a number of UN agencies have made similar calls in the past, this CEB statement means it is now the common position for the entire UN family of agencies. Crucially, the UN Office on Drugs and Crime – the lead UN agency on drug policy – has also endorsed the position; finally clarifying their previously ambiguous position on decriminalisation.

The statement also positions drug policy clearly within public health, human rights, and sustainable development agendas. It represents a welcome and significant step towards ‘system wide coherence’ within the UN system on drug policy.

This has been a key call of civil society groups long frustrated by the lack of coherence across the UN and the marginalisation of health, rights and development agendas by UN drug agencies whose historic orientation has been towards punishment, law enforcement and eradication.

The United Kingdom bans fracking

In October, Scotland banned fracking with immediate effect, arguing that it is “incompatible” with tackling the climate change emergency.The Scottish government said the position of “no support” for fracking followed “a comprehensive period of evidence-gathering and consultation” that started in 2013. The decision thus came after six years of deliberations.In November, England also put a halt to fracking in a watershed moment for environmentalists and community activists.

The decision has been welcomed as a “victory for common sense” by green groups and campaigners who have fought for almost a decade against the controversial fossil fuel extraction process.

Same-sex marriage reform in Asia

Taiwan legalized same-sex marriage on 24 May 2019, following a 2017 constitutional court ruling. Despite intense local and regional opposition, Taiwan became the first nation in Asia to permit same-sex marriage.

Thailand seems to be well on its way to becoming the second Asian country, and the first in South-East Asia, to legalize same sex unions.

Court stops construction of Kenya’s coal power plant

Kenyan judges stopped plans to construct the country’s first ever coal-powered plant near the coastal town of Lamu, a UNESCO World Heritage Site. Local communities and criticsargued that the plant would have dire economic and health effects.

A tribunal canceled the license issued by the National Environmental Management Authority, arguing that the Authority had failed to conduct a thorough environmental assessment.The tribunal ordered developer Amu Power to undertake a new evaluation. The environmental court also faulted the Chinese-backed power plant for failing to adequately consult the public about the initiative, and cited insufficient and unclear plans for handling and storing toxic coal ash.

The project has drawn protests since its inception, with environmentalists saying coal has no place in a country that already develops most of its energy from hydroelectric and geothermal power. Campaigners have also argued that the plant will devastate the island of Lamu, a major tourist attraction, a UNESCO heritage site, and the oldest and best-preserved example of a Swahili settlement in East Africa.

The ruling was a win for environmental activists and local communities, who for three years argued the coal plant would not only pollute the air but also damage the fragile marine ecosystem and devastate the livelihoods of fishing communities.

While the latest verdict delays the coal plant’s development, it doesn’t put an end to it. Amu Power can still apply for a new license or appeal the decision within the next month. For now, though, local communities are celebrating the win.

Public banks are being embraced across the United States

In October 2019, AB 857 — the grassroots-generated, people-powered Public Banking Act — became law in California. This was the outcome of years of work by the California Public Banking Alliance, which did the work of educating legislators, drafting language, and generating massive statewide public support for the bill.

The bill opens the way for public banks to offer a people-controlled alternative to the private, profit-driven Wall Street banks that have failed to serve the public. It paves the way for a growth in public banking in California, the largest state economy in the largest national economy in the world.

Progressives and conservatives across the United States are pursuing more than twenty-five initiatives for public banks. Thirty of the fitty states have proposed legislation in support of publicly-owned banks, and more than fifty organisations are promoting public banks.

Listen to our podcast on Public Banks to see why this is a big development.

Hong Kong protestors showresilience and creativity in face of repression

Hong Kong has been rocked by pro-democracy, anti-government protests for more than five months now. The protests began in June with one main objective—for the government to withdraw a controversial bill that would have allowed extradition to mainland China. Critics worried Beijing could use the bill to prosecute people for political reasonsunder China’s opaque legal system.

By the time Hong Kong’s leader, Carrie Lam, agreed to withdraw the bill, it was too late to quell the movement, which quickly grew to include five major demands, all of them related to expansion of democratic space.

The protests have also led to big pro-democracy votes in their legislature, and some of the biggest mobilizations for democracy ever seen. The protests are ongoing at the time of writing, but Lam’s capitulation to the first demand has only emboldened protesters to pursue more substantial concessions.

Swiss women strike for gender equality

Hundreds of thousands of Swiss women went on strike to protest gender inequalities on 14 June 2019, precisely 28 years after the historic 1991 women’s strike in Switzerland that pressured the government to implement a constitutional amendment on gender equality. The 1991 strike led to the passage of the Gender Equality Act five years later, giving women legal protections from discrimination and gender bias in the workplace.

The women’s strike – known as Frauenstreik (German) and Grève des Femmes (French) online – consisted of demonstrations in the country’s major municipalities for equal pay, recognition of unpaid care work, and governmental representation.

The Swiss Parliament in Bern honored the strike with a 15-minute break in its business. In Basel, a giant fist was projected onto the Roche pharmaceutical company building. In some cities, protesters changed the names of streets to honor women. The Swiss paper, Le Temps, left sections blank where articles edited or written by women would have run.

While demands for equal pay dominated the strike, marchers also called for better protections against domestic violence and workplace harassment.

School kids and workers lead historic wave of climate actions

As global temperatures heat up, so too do demands for action. 2019 saw movements such as Extinction Rebellion, the Week of Global mobilization at the United Nations, and many other protests worldwide.

In September, youth climate activists across the world went on strike to demand immediate action from policy makers, in what has been described as the biggest protest and mobilization since the Anti-Iraq War marches. They brought the issues of climate and labour together by calling for a global climate strike in September 2019. An historic 7.6 million students, (grand) parents and workers from 185 countries participated. More than 70 trade unions around the world supported the general strike and the number of climate groups demanding just-transitions for fossil fuel workers are steadily increasing.

Investors are significant shareholders if they own over 5% of a company’s shares. The sample of firms here are the largest 205 public and private firms across the world, who have more than $50 billion in 2014 sales.

Public Institutions

An Institution is considered ‘public’ if guided by a public mandate, governed under public law and/or publicly-owned by state authorities or public sector entities.

Quantitative Easing

QE is an unconventional monetary policy aimed to stimulate economic activity. Central banks create new money and use this to buy government and corporate bonds from financial markets.

Top 17 Asset Management Firms

BlackRock, US

Vanguard Group, US

JP Morgan Chase, US

Allianz SE, Germany

UBS, Switzerland

Bank of America Merrill Lynch US

Barclays plc, UK

State Street Global Advisors, US

Fidelity Investments (FMR), US

Bank of New York Mellon, US

AXA Group, France

Capital Group, US

Goldman Sachs Group, US

Credit Suisse, Switzerland

Prudential Financial, US

Morgan Stanley & Co., US

Amundi/Crédit Agricole, France

G30

The Group of Thirty (G30) is a privately funded international group of 30 top financiers, academics and policy makers, whose aim is to influence policy and discourse in international finance and global politics.

Trilateral Commission

The Trilateral Commission is an unofficial (i.e. not officially overseen by governments) organisation where 375 global elites from 40 countries meet to tackle pressing international issues.

Shadow Banking

Shadow banking are financial institutions which lie outside of the formal banking regulatory system despite performing similar functions to banks, such as providing credit. Due to this, they raise and lend money more easily, but with considerably more risk.